Press Story

Responding to the latest inflation statistics, William Ellis, senior economist at IPPR, said:

“Headline inflation easing to 2.8 per cent is not expected to continue. The Iran conflict only began at the end of February, and higher oil and gas prices take time to feed through — the real impact will land when Ofgem resets the energy price cap next month.

“Without action, IPPR modelling suggests inflation could peak as high as 5.8 per cent this year. The Treasury could lose up to £8 billion a year through higher debt payments and weaker tax revenue. Leaving this to the Bank of England means hitting households twice — once through higher bills, and again through higher mortgages.

“Ministers should act now. A temporary £2,000 cap on the average household energy bill, alongside an immediate 10p fuel duty cut, would protect households, limit inflation, and reduce the risk of weaker growth later this year.”